41% do not understand retirement saving following Budget changes

More than a third (41%) of respondents admitted not understand retirement saving following the pension changes announced in the 2014 Budget, according to research by Ros Altmann (pictured) and sponsored by MetLife.


The Flexibility in retirement – planning for change report, which conducted two separate surveys, among 2,531 working adults in March and 1,068 working adults in April, found that 24% of working adults said they plan to start making, or to increase, pension contributions after the Budget changes.

Altmann made a series of recommendations in the report, including:

  • A National Retirement Guidance Network, to be launched from April 2015, to focus on those about to retire, before expanding into a wider National Wealth Service. This could be integrated into workplace pensions auto-enrolment, providing regular ‘financial wealth checks’ for all savers.
  • A system of specialist lower-cost advice for people at retirement, with the government increasing the current £150-a-year tax allowance for employers that provide advice in the workplace.
  • The development of new pension products, including Lifetime Pension Accounts, Pension Growth Funds maturing into Pension Income Funds, alternative types of annuities and fixed-term retirement bonds that include advanced, life-deferred annuities. 
  • The development of new products that integrate long-term care funding into pensions and long-term savings, with tax incentives that would kick-start saving for social care.

Altmann said: “To make the new freedoms work for individuals, a revolution in the provision of financial education, information and advice is required.

“There is a massive opportunity to be grasped by financial advisers and the industry.

“These regulatory changes could have a dramatic impact on the advice industry and provide greater protection for customers who would otherwise not have access to the service of an adviser.” 

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Dominic Grinstead, managing director of MetLife UK, added: “The UK has the opportunity to create a world-leading retirement and pensions system and Ros Altmann’s report provides a blueprint for how to achieve that. 

“The outlook for financial services is genuinely exciting and MetLife is committed to playing its part in helping potentially deliver a more prosperous later life for millions of people.”